As expected, the new iPhone OS 3.0 is out. You can click on the "Check for Update" button …
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The message above is the one iTunes spits out if you're one of the unlucky ones—like our own Andi—that can't complete the upgrade. The phone itself is locked and can only make emergency calls, which is what happens when you can't authenticate your phone with iTunes.

It seems like it's just the activation server is acting up, which means you should just hold on until it comes back online. [Thanks tipsters! (You poor bastards.)]

Update: Reader Phil has a tip that fixed the update for him:

In any event, I found a fix online and I thought you'd like to know that there's an issue with iTunes and IE (go figure, huh?). Not much on Google right now, but the error I received after the upgrade was completed was -9808 when contacting the iTunes store. The fix is to go into Internet Explorer, go to advanced options, scroll down to security and UNCHECK "Check for server certificate revocation". Restart iTunes and close IE and you should be fine. My iPhone was stuck on the connect to iTunes screen for forever. After changing that option, I was able to finish the installation and the iPhone rebooted itself and displayed the activation pop-up or whatever you want to call it.

Give that a shot if yours doesn't work. [Thanks Phil!]

Update 2: Looks like Andi's phone is back in business. All she had to do was to connect her phone a couple more times and eventually her device got authenticated. So keep trying that if you're still having trouble.